Illinois Court Upholds Batch Clause Wordings
In a case that amply illustrates the problems that may arise from permitting parallel actions to go forward in two different states, the Illinois Appellate Court has ruled in Allianz Ins. Co. v. Guidant Corp., No. 2-07-0814 (Ill. App. December 29, 2008) that a trial court did not err in refusing to hold that a duty to defend ruling of an indiana court did not collaterally estop a pharmaceutical manufacturer’s liability insurers from contesting coverage in an Illinois proceeding particularly as the Indiana trial court decision was reversed in early 2008 by the Indiana Court of Appeals.
The Appellate Court also affirmed the Illinois trial court’s determination that subsequent product liability claims brought against Guidant could not be aggregated with certain earlier claims based on the policies’ batch clause as the later claims did not arise out of the same claimed product defect. The court rejected the insured’s claim that losses could be aggregated so long as they involved a particular product with any type of defect regardless of whether the claims at issue involve a common product defect. The court held that the batch clause would not have applied in any event as the “Dear Doctor” letters issued by Guidant during the initial policy period did not satisfy the requirement of an “advisory memorandum” for purposes of the batch clause.
